YEREVAN (CoinChapter.com) – Dogecoin DOGE price slid 8% to $0.093 on Dec 7, after briefly peaking at a year’s high of $0.1 on Dec 6, the result of a 30% increase since Dec 1. Dogecoin was the largest ‘loser’ among top 10 cryptos, while some on-chain metrics remain bullish. Could the DOGE price setback point to a looming altcoin decline? Let’s dive in and discuss the matter in more detail.
DOGE On-chain Metrics Bullish
DOGE’s December climb did not fall out of the sky and was powered by the ubiquitous Bitcoin-led pump. Also, the high levels of transaction volumes indicate that Dogecoin bulls might not be done just yet. Data from the on-chain tracker Messari shows Dogecoin transaction volume jumped to a year-high of $1.1 billion on Dec 6.
Notably, high transaction volumes do not automatically assume a bullish bias. However, combined with the increasing number of Dogecoin whales, it could mean high investor interest. DOGE addresses doubled down on adding to their purses. According to Messari, wallets with various coin counts, i.e., retail investors and whales alike, increased their DOGE holdings.
Meanwhile, the Dec 7 profit-taking might not go unnoticed by other altcoin investors. Let’s dive a bit deeper and see why the memecoin king could be the canary in the coalmines for other altcoins.
Dogecoin DOGE price is a ‘Canary In The Coalmines’
Memecoin rallies and reversals are indicative of investor sentiment, due to their high-risk nature. Memecoins, as well as other altcoins initially traded higher as Bitcoin’s bullish price action invited more funds into the sector. However, REGARDLESS of how bullish the markets actually are, memecoins tend to pump off the investor CONFIDENCE in the bullish markers.
Let’s just rewind to the fake Bitcoin spot ETF approval news. It took no time for Bitcoin investors to jump in and BUY without checking the authenticity of the announcement. Additionally, once traders see those green candles, it’s a no-brainer for them to take more risks. And what could be riskier than a memecoin, even a high-market cap one?
Altcoins Have a Resistance to Conquer
Thus, once the Dogecoin investors decide to take profit, dropping the DOGE price, other memecoins might follow suit, and, by extension, altcoin investors at large. As of Dec 7, the collective altcoin market cap had still a resistance to conquer at $700 billion. The upcoming week will shed more light on the altcoin fate and whether the Dogecoin DOGE price will start a new leg up.
